Reforming Unemployment Insurance to allow recipients to continue drawing benefits for a period after starting their own business, and guaranteeing UI eligibility if their venture failed, led to a 25% increase in firm creation.

Of the entrepreneurial jobs that were created, they displayed higher productivity than the incumbent jobs they displaced, leading to an overall rise in productivity. The authors extrapolate that using public programs to insure against the risks of entrepreneurship offers many potential benefits.

empirical